[PUNCH]The Coalition of Ethnic Youth Leaders in collaboration with the African Centre for Justice and Human Rights have expressed their support for the Central Bank of Nigeria for stopping sale of forex to Bureau de Change Operators.
The ethnic groups, which included the Middle Belt Youth Forum, Ohanaeze Ndi Igbo Youths and the Arewa Consultative Youths Movement, as well as the African Centre for Justice and Human Rights, accused BDCs of aiding criminal activities as their unregulated activities had allowed money launderers and terrorists to have access to forex.
The ethnic youth organisations, a joint press conference in Abuja on Monday, said they would join other Civil Society Organisations to ensure that the CBN sustains the new forex policy.
President, Middle Belt Youth Forum, Godwin Meliga, who addressed journalists, said, “Have Nigerians wondered how the bandits in the North-West or the Boko Haram terrorist group in the North-East purchase their weapons in the international market? Have they wondered what these merchants of death do with the huge ransoms they collect from families of victims?
“They convert these huge sums to dollars in undocumented transactions and then use them to purchase weapons such as the anti-aircraft guns with which they used to down a Nigerian Air Force jet just last month. This policy will definitely throw these terrorists out of business because BDCs will not have the volume of dollars they require, thereby ultimately improving our national security.”
Meliga decried that the BDCs were making “excessive profits” from the allocations they got weekly from the CBN, to the detriment of the people.”
According to him, the operators have turned themselves into “agents that facilitate graft and corruption in Nigeria and the CBN would not be expected to tolerate this.”
Meliga said, “It would interest you to know that a few owners registered and promoted multiple BDCs, not because they needed expansion of their businesses but because they took benefit of the weekly $20,000 which the bank allocated to each of the registered BDCs, hence these operators accessed the allocation through multiple companies and used same to aid and launder money.
“It must be accepted that this ban on sale of dollars to the BDCs was necessitated by their dubious and unwholesome practices, adding that the operators have gone beyond their primary role of being retail dealers of FX to wholesale dealers.
“It is because of these illicit businesses that BDCs had risen from a mere 74 BDCs in 2005 to 2,786 BDCs in 2016 and about 5,500 today. In addition, the CBN receives close to 150 new applications for BDC licenses every month.
“This increase in operators is only interested in wider margins and profits from the forex market regardless of prevailing rates in the market. A few wicked businessmen are ripping off the system and now want to make it look like they are the victims. Nigerians cannot allow them to pull wool over our eyes.”
According to the youths, BDCs have neglected their main objectives, alleging that “they are now agents that facilitate graft and corruption in the country.”
The groups stated, “The country cannot continue with the bad practices that are happening at the BDC market. BDCs are originally created to take care of retail needs of the ordinary Nigerians who need a maximum of about $5,000. Now, we see BDCs dealing in single transactions worth millions. This is not their function.
“It is indeed wrong for them to have such unregulated financial transactions. Money launderers, looters of our common patrimony and terrorism financiers have access to forex and can carry out their illicit businesses.
“The launderer or looter cannot carry big bags of naira notes around but can quickly place a call to their BDC collaborators who sell millions of dollars to them in undocumented transactions. These are people who ordinarily are not supposed to have access to Forex but now have unregulated, undocumented access.
“The wider negative national security and economic impact of this can only be better imagined than experienced.”
According to Meliga, Nigeria was the only country in the world where the central bank sells forex directly to BDCs. He asked, “Is it not even strange that we waited this long before we joined the rest of the world? Should this bold step not be generally applauded rather than condemned? Is anyone afraid that the CBN is doing the right thing? Should sponsored opinions to stop the effective implementation of this new policy be allowed to determine the narrative on this issue?”
The youth leader stated that Nigerians must own the process and “apply the necessary pressure” on the CBN to ensure that the new policy is effectively and conclusively implemented.
Meliga added, “It must be stated at this point that the gradual dollarisation of the Nigerian economy with attendant adverse consequences on the conduct of monetary policy and subversion of the cashless policy initiatives of the CBN will be tackled by this new decision of the CBN.
“BDCs had resorted to financing unauthorised transactions with FX procured from the CBN. For many years, the activities of some of the BDCs have continued to undermine genuine efforts at stabilizing the currency which informed CBN’s commencement of weekly sales of forex to the BDC operators.
“It is a known fact that the apex bank had been supplying each licensed BDCs upwards of $10,000 twice per week at the rate of N393, with a mandate to sell with a margin of N2. But they rather sell at over N504, negating the very essence for the weekly allocation and showing why obtaining new BDC licenses became a lucrative business. People allegedly sold their licenses for as much as N80m to N100m.
“Instead of easing access to forex and enhancing the exchange rate of the naira, the Bureau De Change operators have engaged in round-tripping and hoarding of forex, thereby creating artificial scarcity to sell at higher-than-approved rates, thus serving as conduit pipes for money laundering and indulging in many other illicit transactions not envisaged by the CBN.”
